By Kim Young-gyo HONG KONG, May 3 (Yonhap) -- The size of Asia's hedge funds will likely reach a record US$180 billion this year, a research firm said Tuesday, noting that the region's stable economic growth continues to attract investors.

Eurekahedge Pte, a global researcher of hedge funds, estimated the overall assets of the Asian hedge funds will reach a peak by the end of this year comparable to the $176 billion in 2007, when the hedge fund assets in Asia hit an all-time high.

During the first three months of this year, Asia's hedge funds saw total assets under management of $131.3 billion and net inflows of $2.5 billion, the research firm said.

A hedge fund is a type of money that is privately pooled using a wide range of investment techniques, including short selling and leveraged buyouts, in search of risky but massive investment returns.

The firm's statistics showed that hedge funds in Asia excluding Japan recorded a return rate of 2.18 percent in March, beating comparative funds in North America and Europe, which had a yield of 0-1 percent, and Latin America, which had a return of 1.35 percent.

According to a recent study by the Korea Capital Market Institute, South Korea's potential hedge fund market is estimated at $2.4 billion.

Hedge funds are banned in South Korea, and the government is moving to allow them within this year. Currently, South Koreans are only allowed to put their money into hedge funds established in foreign countries.